Waste management company Bingo’s share price plummeted after the competition watchdog raised concerns about its proposed $577.5 million acquisition of Dial-a-Dump, saying the ASX-listed company would squash market share.
The deal would make Bingo the largest building and demolition waste collection company in Sydney and diminish competition for processing, landfill and collections, according to the Australian Competition and Consumer Commission.
Other facilities charge significantly more for heavy loads or are too far away to put price-pressure on Bingo, watchdog chair Rod Sims said in a statement on Thursday.
‘The acquisition would remove future competition between Bingo’s and Dial-a-Dump’s dry landfills, which may lead to higher gate fees than would be likely without the acquisition,’ he said.
‘Competition between Sydney landfills is likely to become more important after the introduction of the Queensland landfill levy, which will make transporting waste to Queensland more expensive.’
The industry relies heavily on the three levels of the supply chain – collection, processing and landfill – and affordable access to processing facilities is needed to compete for customers, ACCC says.
The watchdog is investigating the vertical integration issues and invites submissions by December 13 before a decision expected on February 21.
Bingo’s shares were down 14 cents, or 6.2 per cent, to $2.13 at 1150 AEDT.